Q: Are the banks repaying TARP moneys with fractional-reserve-leveraged
  loans to themselves?

E.g., would it be legal for a bank receiving TARP money
to book that as reserves and lend 90% (10% reserved)
of that to a subsidiary (formed for this purpose),
which immediately deposits its loan proceeds back in the main
bank, thus creating 190% of original TARP deposits against
190% liabilities (original TARP loan + deposit from subsidiary).

Doing this one more time would get you 190% of 190% in
deposits, or 361% of original TARP money, and liabilities
to match exactly, so you have 100% reserve deposits to
match the liabilities.

Now, can you use the 10% fractional reserve rule to
repay the original TARP debt, so you now have 261% of
the original amount left as deposits on the books, and
exactly that demandable by the subsidiary, which deposited
90% x TARP the first time, and 90% of 190% = 171% the
second time, for a total of 261% of the original TARP
amount.

Reserving 10% of the deposits against that 261% x TARP
leaves the main bank with 90% of 261% = 234.9% of the
original TARP amount to play with, and only a sweetheart
subsidiary to deal with to balance the books when convenient.

Is this legal to do? If not legal with a subsidiary,
what about a friendly private entity?